Radio frequency identification (RFID) is a general term that is used to describe a system that transmits the identity (in the form of a unique serial number) of an object wirelessly, using radio waves.
RFID technologies are grouped under the more generic Automatic Identification(Auto ID) technologies.
The barcode labels that triggered a revolution in identification systems long time ago, are inadequate in an increasing number of cases. They are cheap but the stumbling block is their low storage capacity and the fact that they cannot be reprogrammed.
A feasible solution was putting the data on silicon chips. The ideal situation is contactless transfer of data between the data carrying device and its reader. The power required to operate the electronic data carrying device would also be transferred from the reader using contactless technology. These procedures give RFID its name.
One grand commercial vision for RFID is to change the way demand-supply chain moves. In the current almost stone-age scenario, manufacturer produces goods based on forecasts and hopes all of them will be consumed before the shelf life gets them. Good, if the market is consistent. Horrible, if a sudden surge makes the supply fall short and hence everyone in the chain miss on profits. Disastrous, if demand dies suddenly and losses are passed along the chain.
In a not so distant future, RFID enabled stores will monitor the consumption in real time. Shelf will signal the inventory when it needs more stuff and inventory will pull supplies from the manufacturer based on its level of stock.
Simple concept, not-so-difficult implementation and revolutionary results in the pipeline. Thats RFID, in short.